Hyderabad: Gautam Adani, the chairperson of the Indian multinational conglomerate Adani Group, has been indicted by a US court in New York for his involvement in an alleged bribery and fraud scheme.
Adani and his nephew Sagar Adani are among eight defendants, who are accused of paying about Rs 2,029 crore ($265 million) in bribes to Indian government officials between 2020 and 2024 to secure solar energy supply contracts with state-run power distribution companies (DISCOMS).
Even when the bribery claims are associated with Indian authorities, US law allows it to prosecute corruption investigations involving US investors or markets.
The period in which the bribes were allegedly paid coincides with the release of a damning report by US-based short seller Hindenburg Research in 2023. The report accused the Adani Group of stock manipulation and accounting fraud. It triggered a $150 billion loss in the Adani Group's market value.
The alleged bribery period coincides with the publication of a crucial report by Hindenburg Research, a US-based short seller, in 2023. It charged the Adani Group with accounting fraud and stock manipulation, following which the market value of the conglomerate dropped by $150 billion.
Following the charges, Adani Group denied all of them, saying the allegations by US prosecutors are “baseless” and the conglomerate is a “law-abiding” organisation, “fully compliant" with all laws.
“The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied,” the group spokesperson said in a statement, adding that all possible legal recourse will be sought.
Let’s look at a timeline of how the Adani crisis unfolded in the nearly 2-year span.
Developments In 2023
January 24: US-based short-seller Hindenburg Research accused the Adani Group of fraud and brazen stock price manipulation. The revelations resulted in up to 10% of the conglomerate’s stocks.
January 27: The conglomerate denied all allegations as false and announced that it will take a legal route against Hindenburg Research in the US and India.
January 30: The issue of the Adani-Hindenburg revelations triggered a stormy Budget session in the Parliament as the opposition demanded a debate on the reported controversy as some government enterprises like Life Insurance Corporation of India (LIC) had stakes in Adani Group shares. Later in the session, the opposition led by the Congress party demanded a probe by the Joint Parliamentary Committee (JPC) into the Hindenburg allegations.
January 31: Adani Enterprises Ltd. (AEL), following the public offer (FPO), received a full subscription, leading to modest stock gains for the Adani Group.
February 1: Adani Enterprises Ltd. (AEL) suddenly cancelled its Rs. 20,000-crore FPO despite successful performance (28.5% gain) a day ago, saying it would return the investor’s money collected in the FPO given the market risks.
Credit Suisse has stopped accepting bonds of Adani Group companies as collateral for margin loans to its private banking clients, per a Bloomberg report.
Amid the crisis, Adani slipped from the number three position in the Forbes list of richest persons to 14th, with his net worth down by $11 billion in a day.
February 9: The Supreme Court agreed to hear a plea seeking directions to the Centre to constitute a committee monitored by a retired SC judge to probe into the Hindenburg Research report.
February 10: The Supreme Court sought the regulatory framework from the Securities and Exchange Board of India (SEBI) and the central government to produce the existing regulatory framework in place to protect investors, who reportedly lost huge money following the Hindenburg report.
March 2: The Supreme Court directed to set up a panel of former judges to probe the recent Adani Group amid a loss in the share market following Hindenburg Research's allegations. The court also asked SEBI to conclude its probe within two months.
May 8: The expert panel set up by the SC submits its report in a sealed cover to the apex court. Later, media reports suggested that there was no evidence of manipulation or regulatory failure in the Adani Group.
May 17: The Supreme Court grants SEBI nearly 2 months to submit its report on the probe into the Adani-Hindenberg report issue.
August 14: The SEBI files an application in the SC seeking 15 more days to file a report.
August 25: The SEBI informed the SC that two of the 24 investigations it has conducted in the Adani-Hindenburg case are interim, while the other 22 are final. The market regulator said that it was awaiting two probes from external.
November 24: The Supreme Court was informed by SEBI that it will not be requesting an extension to complete its investigation into the Adani-Hindenburg case.
December 4: Adani increased his net worth by $10 billion as the Bloomberg Billionaires Index ranked him at number 15.
December 5: The US government's International Development Finance Corp. (DFC) said that the claims made by Hindenburg Research did not apply to Adani Ports. It said the conclusion was drawn after doing “a due diligence assessment on Adani Group.”
Developments In 2023
January 3: The Supreme Court grants three months to SEBI to complete its probe into allegations against the Adani Group. The court also denied transfer of the case to the CBI, relieving Adani Group of further probe.
January 25: The firms linked to the Adani Group managed to reduce losses, helping the conglomerate recover from the shocks caused by the Hindenburg report. Three of the ten Adani firms that are listed had higher pricing than they did on the same day last year.
June 2024: Shares of the Adani Group regain all of their losses from the Hindenburg period.
July 2: According to Hindenburg Research, SEBI issued a notice accusing them of violating Indian laws. Naming Kotak Mahindra Bank, the market regulator also alleged that the short-seller was colluding with an investor who made a short bet against the Adani group ahead of the report's release, which Hindenburg denied.
July 2: Kotak Mahindra Bank denied all allegations and clarified Kingdon Capital never disclosed that they had any relationship with Hindenburg nor that they were acting based on any price-sensitive information.
July 15: The Supreme Court dismissed a petition seeking a review of its January 3 order, in which it refused to transfer the Adani-Hindenburg probe to the CBI.
August 10: On the evening of August 10, Hindenburg Research said it would “drop a bombshell” on India. After several hours, it published a blog alleging SEBI’s chairperson, Madhabi Puri Buch, had stakes in obscure offshore entities used in the Adani money siphoning scandal.
November 20: Adani was indicted with seven others in New York federal court on charges related to a massive bribery and fraud scheme. They were accused of paying more than $250 million in bribes to Indian government officials to obtain “lucrative solar energy supply contracts with the Indian government.”
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